We live in a world where new businesses are springing up like mushrooms left, right and center. The market is crowded, and for any category of product or service, customers can choose from a multitude of customer loyalty options.
Needless to say, simply offering a great product or service is no longer enough for today’s brands – modern consumers are much more demanding. They expect companies to be there for them after the sale. The product is only part of what customers buy; they also buy the experience and lifestyle that comes with their purchase. In such a competitive scenario, it is the relationships that brands build with their customers that separate successful businesses from those that ultimately fail.
According to Microsoft’s Global State of Customer Service report, 58% of consumers end a relationship with a company because of poor customer service. This is why gaining and maintaining customer loyalty becomes such an important goal for any business that wants to be competitive.
In this article, we’ll go over the basics of what customer loyalty is, why it’s important, and how you can earn a solid base of loyal brand advocates.
What is Customer Loyalty?
Customer loyalty is the relationship between a customer and a brand that goes beyond buying and selling. It’s about creating an emotional connection that makes customers want to come back to your brand again and again. A loyal customer will always choose you over the competition. Besides adding tremendously to their lifetime value (CLV) with your brand, they will also drive word of mouth by recommending your products to others.
Why is customer loyalty important?
Here are some of the top reasons why you should invest time and effort in customer rewards.
It improves customer retention rate and lifetime value
Customer loyalty is a major factor in improving lifetime value and customer retention.
Loyal customers are the most valuable asset for any brand. Regular customers tend to spend more and generate larger transactions. In addition to getting repeat customers, your loyal customers are the most likely to try your new products and services – it’s much easier to upsell and cross-sell them.
It improves word of mouth
Loyal customers are also more likely to recommend you to their friends and family. This type of word of mouth marketing strategy is essential to growing your business because it is both credible and compelling.
It helps you improve the quality of your products and services
Loyal customers give you useful information about your product, its quality, its advantages and its main defects. They help you see what is working well in your product or service and what areas you need to improve. This customer feedback is far more valuable than the market research and internal discussions you have with your team.
It gives your brand a competitive edge
Loyalty gives your brand an edge over your competition. When consumers have similar needs or requirements, loyalty always trumps price, product, and advertising. Brand loyalty significantly influences customers’ purchasing decisions.
Final Thoughts
The key to retaining customers is to respect them as people and show it in your dealings with them. As long as you stick to this philosophy, you will find that your customers will come back to you as loyal customers. In today’s business environment, it is impossible to emphasize the importance of customer loyalty. With these tips, you can create loyal customers who will visit your business for years to come. For more info, visit us at DX United!
